What is diversification?
When we talk about diversification in investments, we mean the distribution of funds in a portfolio between different groups of assets to reduce risks. It can be cloud mining, aggressive investments in new projects, or investments in the top 10 cryptocurrencies.
Combining high-risk asset types with others gives you a balanced portfolio. The overall risk will be lower than that of each instrument individually. It is a solid investment strategy that will help you achieve your goals, no matter what the market does.
You must have a diversified set of crypto assets, and you should also diversify your portfolio across different types of investments. Determining and maintaining your strategic asset allocation are some of the most important ingredients to your long-term investment success.
Why diversify?
The goal of diversification is not only to improve the efficiency of investments. It does not guarantee profit or loss protection. However, diversification can increase returns at any level of risk. It is not necessary to invest in all industries at once. Choose what you like best or what you are best at.
You can also create an investment portfolio depending on the market situation. When the market is volatile, you can wait it out in mining contracts; if it is oversold, you can start collecting portfolios with a growth perspective. When you achieve a good profit, you can sell portfolios, buy mining contracts, and reinvest the already obtained profit in more risky products.
Manage your portfolio
We suggest that you regularly service your portfolios yourself or with the advice of our financial advisor. It means:
- Monitoring. Periodically assess your investments for changes in strategy, relative performance, and risks.
- Rebalancing. Re-structure your investments to maintain a comfortable level of risk. There are many different ways to restore balance. For example, you can rebalance if any part of your asset pool deviates from your goal by more than 30%.
- Update your portfolio at least once a year or whenever your financial circumstances or goals change. Review your plan to make sure it still makes sense. This way, you will have a balanced investment portfolio.
In our application, you have your own personal analyst manager. He will gladly provide you with a free portfolio consultation in your native language. So invest in a balanced way with ECOS and get maximum profitability!